Legal Insights on the Jeff and MacKenzie Bezos Divorce

The world’s richest person, Amazon.com founder Jeff Bezos, is getting
divorced. Today, Jeff Bezos and MacKenzie Bezos
announced over Twitter the end of their 25-year-long marriage.

The couple resides in Washington state, where Amazon is also headquartered,
and where their divorce is likely to be finalized. As Seattle’s
largest family law firm, attorneys at McKinley Irvin have been speaking
with the media about the divorce and what effect it may have on Bezos’s
wealth and his companies.

About the Twitter announcement

The couple’s tweet this morning set the tone for what appears to
be, at present, an amicable divorce. McKinley Irvin partner and First
Vice President of the King County Bar Association, Jennifer Payseno,
provided insight to Bloomberg about what this could mean:

“’My guess is they’ve probably already worked up some
sort of framework, and that’s why they’re announcing it now,’
Payseno said of the Bezoses. ‘It’s not going to be made public.’”

Washington laws on property division

In the interview with Bloomberg, Jennifer Payseno also discussed how their
assets may be divided:

“There is no set formula in Washington law as to how assets should
be split, said Jennifer Payseno, a partner with McKinley Irvin in Seattle
who handles high-net worth divorce cases for the firm. Wealthy couples
often agree how to divide their assets before bringing the matter to a
judge, and those details are often filed confidentially with the court.”

If no such agreements exist, MacKenzie Bezos could be entitled to half
of the marital assets. With her husband’s net worth estimated at
$136.2 billion, the settlement of this divorce would be one of the largest
in history.

Payseno also notes that a husband and a wife have a duty of good faith
and fair dealing with one another. Similar to a business partnership,
transactions between spouses must be fair. Both spouses are entitled to
access all relevant information and there will be full disclosure of their
assets and liabilities.

“If they are able to work amicably and reach an agreement, this gives
them better flexibility in structuring a settlement that allows them to
maximize their assets. This results in a benefit to both parties and will
also protect against any impact on Amazon.”

“The couple lives primarily in Washington State, which requires divorcing
spouses to equitably divide ‘community property,’ including
all income generated during a marriage. ‘It seems very likely, if
not 100% a certainty, that whatever Jeff Bezos has earned at Amazon has
been community income,’ says David Starks, a partner at the Seattle-based
law firm McKinley Irvin. He added, however, that through a prenuptial
or postnuptial agreement, ‘You can elect to have your assets treated
differently, and that’s not uncommon.’”

In an interview with the Seattle Times, Starks said he would be surprised if there was a prenuptial agreement.
Such agreements are more common in second marriages and the Bezoses met
when they were young.

Effect on Amazon

Naturally, people are questioning whether the divorce will impact Amazon.
McKinley Irvin attorneys agree that shareholders do not need to worry.

“I do not see that the divorce will have any impact on Amazon or
its shareholders. If the parties are able to work this out amicably and
through settlement, there are options that are likely available for the
spouses to retain shares and not impact voting rights,” said Paysneo.

In
an interview with CNBC, David Starks speculated that the couple already reached an arrangement
protecting Jeff Bezos’s voting power before making their public
announcement.

"I have to imagine that some of the longest conversations and most
legal mind power went into how to fashion a settlement that retained Jeff
Bezos's ability to remain a controlling shareholder in Amazon."

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